Bankruptcy FAQ: Answers to Common Questions for Northwest Louisiana Residents

Chapter 7 bankruptcy is often called a “liquidation” bankruptcy, though for most individuals who file, there is little or nothing to liquidate. It’s a relatively fast process — typically completed in three to six months — and at the end, most or all of your unsecured debts (credit cards, medical bills, personal loans) are discharged. To qualify, your income must fall within certain limits based on the means test.

Chapter 13 works differently. Rather than discharging debt immediately, it restructures what you owe into a three-to-five-year repayment plan. You make monthly payments to a bankruptcy trustee, who distributes funds to your creditors. Chapter 13 is often the right path for people who have assets they want to protect, who are behind on a mortgage and want to stop foreclosure, or who earn too much to qualify for Chapter 7.

Both chapters have specific rules under federal law, and Louisiana has its own exemption laws that affect what you can protect when you file. Understanding which option fits your situation is something an attorney can help you work through based on your actual numbers and goals.

Yes. One of the most immediate and meaningful effects of filing for bankruptcy is the automatic stay. Under federal law, once your case is filed, most creditors are legally prohibited from contacting you, pursuing collection actions, garnishing your wages, or taking any steps to collect on debts covered by the bankruptcy.

For many people in Shreveport and Bossier City who are fielding multiple calls a day from debt collectors, this relief alone changes things significantly. The phone calls stop. The threatening letters stop. The wage garnishment that’s been shrinking your paycheck gets paused.

If a creditor violates the automatic stay and continues to contact or pursue you after your case is filed, they can face legal consequences. Creditor harassment is a serious matter, and you have rights — both under bankruptcy law and under the Fair Debt Collection Practices Act.

This is one of the most common fears people bring to a first consultation, and the answer for most filers is no. Federal bankruptcy law and Louisiana state law both provide exemptions — categories of property that creditors cannot touch, even during bankruptcy.

In Louisiana, these exemptions can cover things like a portion of your home equity, retirement accounts, certain personal property, and your vehicle up to a specific value. The specifics depend on your situation and what you own, but the goal of the exemption system is to make sure that bankruptcy gives you a fresh start — not to strip you of everything you’ve built.

In Chapter 7 cases, most filers are what the law calls “no asset” cases, meaning there is nothing available for the trustee to liquidate after exemptions are applied. Chapter 13 cases allow you even more flexibility to keep assets while catching up on secured debts like your mortgage or car loan.

Bankruptcy does affect your credit, and it’s important to understand what that means before you file. A Chapter 7 bankruptcy stays on your credit report for ten years; a Chapter 13 stays for seven. During that time, it will be visible to lenders and may affect loan approvals and interest rates.

That said, many people who file for bankruptcy are already dealing with significant credit damage from missed payments, collections, charge-offs, and judgments. In many cases, their credit score is already suffering before they ever file. Bankruptcy can actually mark a turning point — a clean date from which recovery begins.

Many people rebuild their credit meaningfully within two to four years of filing. The path looks different for everyone, but it begins with eliminating the debt that was dragging the score down in the first place. A realistic conversation about credit and long-term financial goals is something worth having with your attorney before you make any decisions.

This depends on several factors: how much equity you have in your home, whether you’re current on your mortgage, and which chapter of bankruptcy you file. In Chapter 7, if you’re current on your mortgage and your equity falls within Louisiana’s homestead exemption, you may be able to keep your home by continuing to make payments and reaffirming the debt with your lender.

Chapter 13 is often the preferred path for homeowners who are behind on mortgage payments and want to avoid foreclosure. The repayment plan allows you to catch up on missed payments over time while keeping the home. This is one of the most valuable features of Chapter 13 for families in Bossier Parish and the surrounding communities who are fighting to hold onto their homes.

If you’re facing foreclosure, time matters. The sooner you speak with an attorney, the more options you’re likely to have.

In many cases, yes. If you’re current on your car loan and your vehicle’s value falls within the applicable exemption limits, you may have the option to reaffirm that debt and keep the car. Reaffirmation means you agree to remain personally liable for the loan in exchange for keeping the vehicle.

In Chapter 13, you may also have the ability to restructure a car loan under certain circumstances, potentially reducing the interest rate or the amount owed if the car is worth less than you owe. Every situation is different, and the rules here can be complex.

The bottom line: losing your vehicle is not an automatic outcome of bankruptcy, and your attorney will work through the best approach based on what you owe, what the car is worth, and how it fits into your overall financial picture.

Chapter 7 bankruptcy can eliminate many types of unsecured debt, including credit card balances, medical bills, personal loans, utility bills, and in some cases, older income tax debt. These are debts that are not secured by property and do not fall into a protected category under federal law.

There are debts that bankruptcy cannot discharge. Child support and alimony obligations survive bankruptcy. Most student loans are not dischargeable in standard bankruptcy proceedings, though there are exceptions in cases of undue hardship. Recent income tax debts, criminal fines, and debts arising from fraud are also generally not dischargeable.

Understanding exactly which of your debts can be eliminated — and which will remain — is an essential part of evaluating whether and how bankruptcy makes sense for your situation.

Most bankruptcy filers do not appear in federal court in the traditional sense. What you will attend is called a Meeting of Creditors, also known as a Section 341 meeting. This is a relatively brief proceeding where a bankruptcy trustee asks you questions about your finances and the information in your petition under oath.

The meeting is typically straightforward, especially when you’ve worked closely with your attorney to prepare accurate and complete paperwork. Creditors are notified of this meeting and have the right to attend, though in most consumer cases they do not. Your attorney will be with you throughout the process.

For residents of Shreveport and the surrounding parishes, bankruptcy cases are handled in the U.S. Bankruptcy Court for the Western District of Louisiana.

Chapter 7 typically takes three to six months from filing to discharge. It’s designed to be a relatively quick process. Chapter 13, by contrast, involves a repayment plan that runs three to five years. The longer timeline reflects the structured repayment involved, but for many people, that structure is exactly what they need.

The time it takes to prepare and file your case — gathering documents, completing required credit counseling, drafting the petition — varies depending on the complexity of your situation and how quickly you can provide what’s needed. Working with an attorney helps keep the process moving efficiently and helps avoid errors that could cause delays.

Yes. Federal law requires that anyone filing for bankruptcy complete an approved credit counseling course within 180 days before filing. The course is typically completed online or by phone and takes about an hour. Once you file, you’ll also need to complete a debtor education course before your discharge is granted.

Both courses must be taken through agencies approved by the U.S. Trustee Program. Your attorney can guide you to approved providers and make sure you meet these requirements within the proper timeframes. These are non-negotiable steps — missing them can delay or jeopardize your case.

Yes. Married couples have the option to file a joint bankruptcy petition. Filing jointly means both spouses’ debts and assets are included in the case, and both receive the benefit of the discharge. This can be an efficient approach when both spouses have significant debt or when most of the debt is shared.

However, filing jointly isn’t always the right call. If one spouse has significantly more debt than the other, or if one spouse has assets or income considerations that could complicate the case, filing individually may make more sense. Your attorney can walk through the specifics and help you determine the most beneficial approach for your household.

Prior bankruptcy filings affect your eligibility to file again and your ability to receive a discharge. Under federal law, if you received a Chapter 7 discharge, you must wait eight years from the date of that filing before you can file another Chapter 7 and receive a discharge. For Chapter 13 to Chapter 13, the waiting period is two years. There are also waiting periods that apply when switching between chapters.

If you have a prior filing and are facing renewed financial hardship, don’t assume you’re out of options. The timing matters, and an attorney can help you understand exactly where you stand and what options are available to you.

Federal law prohibits government employers from discriminating against employees solely because they filed for bankruptcy. Private employers operate under somewhat different rules, though discriminating against a current employee for filing is generally prohibited as well. Bankruptcy cases are public records, but in practice, most employers do not routinely search bankruptcy filings.

If you’re concerned about your employer finding out, that’s an understandable concern and one worth discussing with your attorney before you file.

Yes. One of the most impactful immediate effects of filing for bankruptcy is the halt of wage garnishment. The automatic stay goes into effect the moment your case is filed, and it stops garnishments tied to most types of debt covered by the bankruptcy.

For families in Webster Parish, Claiborne Parish, and Red River Parish who are losing a portion of every paycheck to garnishment, this can mean immediate financial breathing room. Once the underlying debt is discharged or addressed through your repayment plan, the garnishment doesn’t return.

There are limited exceptions — child support garnishments, for example, are generally not affected by the automatic stay. But for credit card debt, medical bills, and judgments from unsecured creditors, filing for bankruptcy can stop garnishment quickly.

There are two components to the cost of filing for bankruptcy: attorney fees and court filing fees. Filing fees are set by the federal court — currently $338 for Chapter 7 and $313 for Chapter 13, though these figures can change. If you cannot afford the filing fee, it may be possible to pay it in installments or, in some circumstances, to request a fee waiver for Chapter 7.

Attorney fees vary depending on the complexity of your case and the chapter you file. Many bankruptcy attorneys offer a free initial consultation so you can understand your options before committing to anything. At The Cook Law Firm, APLC, we’re transparent about costs from the beginning because we understand that financial pressure is exactly why you’re here.